The U.S. stock market saw a split performance on Tuesday, with the S&P 500 and Nasdaq retreating as the once-unstoppable AI chip rally hit a wall. Sentiment soured after reports emerged that Chinese startup DeepSeek is working on proprietary AI hardware, potentially curbing reliance on major players like Nvidia, which saw its own shares dip nearly 2%. The broader semiconductor sector bore the brunt of this pessimism, with the Philadelphia SE Semiconductor index sliding 5.5% to a four-week low. Even a stellar earnings report from Samsung Electronics, which saw profits skyrocket 19-fold, failed to buoy the sector, as investors pivoted toward profit-taking amid fears that chip stocks may be overbought.

Despite the turbulence in technology, the Dow Jones Industrial Average managed to maintain its momentum, hitting a fresh intraday record above 53,000 points. This divergence was driven by strong performances in the healthcare and consumer staples sectors, which helped offset the broader tech sell-off. Meanwhile, market participants are keeping a close watch on shifting geopolitical tensions and upcoming economic signals, including the highly anticipated release of the Federal Reserve’s latest meeting minutes. As the industry awaits the Nasdaq debut of SK Hynix and processes recent moves from companies like Rivian and SpaceX, the market remains in a cautious, wait-and-see mode.